By Dilip Davda
The secondary market surprised one and all with a sharp pullback rally, its second positive week in a row. The Sensex gained 2,257 points and the Nifty 626 points. Both benchmarks ended at respectable levels: the Sensex at 74,729 and the Nifty at 23,146. Monday began with a loss, but Tuesday and Thursday delivered the big gains, and every session after Monday closed with positive breadth. Investors across the board will welcome this dramatic turn, and with the festive season on, we may well see a midterm rally.
There is one thing I would watch, though. FIIs, who were net sellers for the first four sessions, turned net buyers on Friday, while DIIs, who had bought through Thursday, turned net sellers. Whether that switch continues is the question for a week that has only four sessions, since all markets are closed on Tuesday for Dussehra.
The rupee recovered well to Rs 94.96 a dollar, but crude kept boiling to $109.90 a barrel. Those two will remain the main indicators for the next few weeks, along with continuing worries over deficient rain.
A Quiet Fortnight
While the secondary market rallied, the primary market went into consolidation mode with limited activity. Two mainboard IPOs opened and closed within the week. HD Fire Protect was the star, subscribed 131.73 times, while Fusion CX managed 4.68 times. The gap between the two shows how selective investors have become.
Four large mainboard IPOs opened during the week: Sahajanand Medical Technologies, Bonfiglioli Transmissions, Zetwerk and Tonbo Imaging. All four close on Monday, 19 October. Till Friday’s close, they stood at 0.83, 0.99, 0.31 and 7.78 times subscription respectively. Only Tonbo Imaging had comfortably crossed full subscription, so Monday’s last-day demand will decide how these issues fare.
Paras Healthcare is opening its Rs 1,450 crore IPO in the coming week.
SME Takes a Pause
The SME platform appears to be on pause. Just two issues opened and closed during the week, Vaibhav Vyapaar (3.23 times) and Ravita Engineering (7.11 times). Shellz India opened and was at 0.89 times till Friday, with its issue also closing on 19 October. For the coming week, we have a dry spell for SME IPOs. The only new listing was R K Fashion, which came in at a 2.44% discount, and there were no mainboard listings at all.
On the rights issue front, Natco Pharma opened last week, and the coming week brings three: Ola Electric, Shivam Auto and Continental Controls. IBL Finance’s NCD opened last week, and there is a dry spell for NCDs in the coming week.
Now an important development. As per reports, SEBI is mulling revised rules for IPOs and for new listings, and this may bring a temporary halt to the primary market. We have to wait and watch on this front. Until we know more, investors have to be cautious before parking funds in the primary market.
Jio Platforms: The Main Event
The one everyone has been waiting for arrives in the ensuing week: the mega IPO from Jio Platforms, at Rs 30,213 crore. As per the latest announcements, the price band is Rs 1,065 to Rs 1,119, with the issue opening on Wednesday, 21 October.
Jio Platforms is expected to be an Indian global player in the coming few years, leading in telecom, IT and AI-based technology and the devices built on it. It has a well-diversified business model and has lined up many new plans to lead the world.
